Search the Internet          Tips  Sites: Finance, Investment

CII says riots not to hit FDI flows

The wave of violence in Gujarat will not hit foreign investment flows into the country, a leading industry body said on Tuesday.

There have been fears that foreign companies may shy away from investing in India after the bloodletting in Gujarat, which left more than 825 people dead.

The violence in Gujarat, India's second most industrialised state, began after a train compartment wa torched by a mob killing 59 people.

"I don't think foreign investments in India will be hit because of (the riots in) Gujarat," Confederation of Indian Industry president Sanjiv Goenka told Reuters on the sidelines of a business seminar in the eastern city of Kolkata.

"Any happening of this nature will have an impact on Gujarat. It will not have a national impact," Goenka said.

Canada's envoy to India, Peter Sutherland, said on Monday that foreign investments in India would be affected if normalcy was not quickly restored in the coastal province.

A Kolkata-based daily, The Telegraph, reported on Monday that a German manufacturing company and a US biotechnology firm had backed out of investing in Gujarat because of the riots. The report did not name the companies.

On Sunday, Finance Minister Yashwant Sinha also said the Gujarat riots were unlikely to have any impact on foreign direct investment flows into the country.

In 2000, India set an annual target of attracting $10 billion in foreign direct investment but at the moment draws only $2.5-3.0 billion each year.

ALSO READ:
Gujarat riots not to hit FDI flow, says PM
The Rediff Budget Special
Money

Tell us what you think of this report